"I loved the idea that Jay-Z was going to do the music," Murphy said of the project. "I met with Jay and talked to him about it. I wanted to write the script and direct it. And then [F/X TV pilot] American Horror Storygot picked up. Willow is a certain age and you need a script by November. I didn’t think I could do it. So now she’s got Emma Thompson who is 50 million times better than me."

The film is expected to be an updated version of the classic story of the red-headed orphan. Murphy says he would have removed the character from New York City. "I wish I could have had the time to do it. We talked about how we were going to set it in Detroit," Murphy, who is working on a film adaptation of The Normal Heart, said.

Thompson received Academy Awards for starring in Howard's End and for her screenplay of Sense and Sensibility. She also wrote the screenplay for the upcoming film remake of My Fair Lady. Her many film credits include The Remains of the Day, Love Actually, In the Name of the Father, An Education, Nanny McPhee, Last Chance Harvey, Brideshead Revisited, Harry Potter and the Order of the Phoenix, Wit and Angels in America.

Annie first opened on Broadway on April 21, 1977 and ran for 2,377 performances. Featuring music by Charles Strouse, lyrics by Martin Charnin and a book by Thomas Meehan, the musical took home seven Tony Awards, including Best Musical. The musical has previously been adapted for the big screen in 1982 and again as a 1999 made-for-TV movie. A James LaPine-directed revival is eyeing a Broadway run in 2012.